Peter Foster: Burying carbon storage

End to $1.4-billion Pioneer carbon sequestration ­project is a victory for economic sanity

The ditching of TransAlta’s $1.4-billion Pioneer carbon capture and storage (CCS) project represents a victory for economic sanity, but a mixed blessing for Alberta Premier Alison Redford. Ms. Redford indicated after she took over from Ed Stelmach last year that she wasn’t exactly a fan of hefty subsidies for CCS. However, the abandoned project will no doubt provide ammunition for those environmental NGOs lining up to present her with dinosaur awards at next month’s Rio+20 conference on sustainable development, where she will attempt to make the case for the oil sands to a distinctly unsympathetic ­audience.

Attacks on her are likely to be more virulent because the pillars of sustainable development — alarmist science, grand schemes of UN-co-ordinated global governance, carbon taxes and government-promoted “technologies of the future” — are all crumbling. Not that you will hear this from the mavens of market condemnation and eco-authoritarianism, who are inevitably stepping up their propaganda ahead of the Rio ­expensesfest.

Last week the British Royal Society, which had already abandoned its credibility by supporting climate hysteria, released a garbled report that could have come out of any UN agency, full of primitive zero-sum, anti-materialism. The International Energy Agency joined in with warnings of 6C global temperature rises in the absence of concerted bureaucratic action.

The TransAlta announcement isn’t the only piece of bad Canadian news for proponents of green industrial strategy. This week, Ottawa-based Iogen and Royal Dutch Shell cancelled a cellulose ethanol plant in Manitoba, which would have made biofuel from agricultural waste.

Carbon capture and storage would be a non-starter but for climate alarmism and government policy threats. As noted, Mr. Redford was lumbered with subsidizing CCS by her predecessor, the hapless Ed Stelmach. Mr. Stelmach committed a nice, round $2-billion of taxpayers’ money to CCS in the naive hope of buying off braying environmental NGOs. However, he made his commitment in 2008, before the global financial crisis hit and the Kyoto process collapsed, pulling the rug from the carbon pricing that would have made projects such as Pioneer “viable,” albeit at the expense of much greater job losses elsewhere.

Wildrose leader Danielle Smith said during the Alberta election campaign that she would ditch the CCS fund as a waste of money. She may have lost the election but may take comfort that the fund may be in the process of ditching itself.

There are three other prospective CCS projects in Alberta, whose future must now inevitably be in doubt. A $1.2-billion CCS project is proceeding in Saskatchewan, en route to white elephant status. Last October, a £1-billion ($1.6-billion) CCS project in Scotland was abandoned. The U.S. government, meanwhile, proceeds with a billion-dollar CCS boondoggle — FutureGen — in President Obama’s home state of Illinois. The U.S. Energy Department has predicted that it might take 20 years to get up and running.

TransAlta and its partners — Capital Power Corp. and Enbridge Inc. — abandoned Pioneer even though the Alberta and federal governments had committed close to $800-million to the project. The sponsors hoped to profit from selling CO2 to those who would inject it into wells to enhance oil recovery, or by flogging “credits” to those forced to buy them for committing industrycrime. As it turned out, there were few if any customers for the physical CO2, and a similar scarcity of those lining up to buy government-stamped CO2 burial certificates once emissions-trading schemes had collapsed. For taxpayers, the good news is that they reportedly kicked in “only” $20-million to Pioneer before it was deep-sixed.

A TransAlta spokesman declared that the project had been killed by “regulatory uncertainty,” but since, when it comes to climate policy, regulatory certainty is synonymous with economic suicide, there is much to celebrate in this decision. Nevertheless, the TransAlta pullback creates problems both for Ms. Redford and the Harper Conservatives in terms of commitment to shadow overall CO2 reductions in the U.S. Such commitments are largely a matter of political strategy in dealing with collective hypocrisy over climate, and a still dangerous — or at least expensive — green global bureaucracy. For the vast majority of politicians, even Stephen Harper, climate skepticism is not an option. (Hilariously, the grand old man of global ecosocialism, Maurice Strong, suggested to The Globe and Mail this week that Mr. Harper might be blinded to the truth by “ideology.” Mr. Strong, presumably, sees himself as motivated only by objective science and universal compassion.)

Ms. Redford has made a 20-year, $3-billion commitment to oil sands technology research (although why giant companies would need government “help” is uncertain) plus alleviating the overall environmental impact of the oil sands. It remains to be seen whether other provinces — most notably Quebec and Ontario — will go to Brazil to stab Ms. Redford in the back over climate change (as Jean Charest tried with Stephen Harper at Copenhagen in 2009). At least Premier Redford has the kind of genuine internationalist credentials that make it difficult for professional whiners to bleat that she doesn’t care about the poor and destitute. We can only support her courage in going to Rio, and congratulate her on the budget boost provided by the abandoning of Pioneer.

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